Parliament’s standing committee on public accounts on Monday said it would summon auditing firm KPMG to explain to MPs why it should continue doing business with the state given questions around its credibility.
“KPMG’s unexplained withdrawal of a South African Revenue Service (Sars) report and its work in the integrated financial management system (IFMS) project, in which it was paid almost R5 million before delivering on the contract, raise questions about its integrity,” Scopa chairman Themba Godi said.
This followed news that KPMG intended to withdraw its report on a probe into the existence of a “rogue spy unit” within the Sars.
“Scopa intends to call KPMG to clarify its conduct and to justify why it should continue doing business with the state,” Godi said.
“Private audit firms must demonstrate that they have integrity and work in the public interest, beyond simply making a profit.
"Scopa will not hesitate to call on government not to use certain audit firms if they are found to be unethical.”
Parliament’s standing committee on finance also wanted answers from the Independent Regulatory Board for Auditors (Irba), which was expected to report to the committee on October 3.
“This was already on our draft programme for the fourth quarter, before the KPMG-Sars matter arose over the weekend.
"This new matter falls under the mandate of Irba and presumably they will investigate and report to us,” said committee chairman Yunus Carrim.
“According to legal advice from Parliament, our committee is not authorised to carry out any investigation. Only the Irba can investigate.”
Earlier on Monday, Sars commissioner Tom Moyane lashed out at KPMG, insisting there was nothing flawed in the firm’s report and that KPMG had no right to withhold it, as it had surrendered all rights to the Revenue Service.
KPMG said it would refund the R23 million it earned from compiling the report on the alleged rogue unit and would also donate a further R40 million it earned in fees from from Gupta-controlled firms to charity.
On Friday, KPMG South Africa appointed Nhlamu Dlomu as its new chief executive.
Dlomu said that she was committed to restoring the embattled audit firm’s fundamental values of ethics and integrity in a bid to salvage its credibility as she takes over the helm at a time of deepening crisis.
This came as Trevor Hoole tendered his resignation on Friday as the chief executive of KPMG SA, with chief operating officer and country risk management partner Steven Louw also stepping down. Five other senior partners of KPMG SA also decided to leave the firm.
KPMG SA would also be seeking the dismissal of Jacques Wessels, lead partner on the audits of the non-listed Gupta entities.
KPMG drew heavy criticism regarding the “Sars Report” it delivered after it was commissioned by the Revenue Service to investigate allegations of wrongdoing by an intelligence unit set up while Pravin Gordhan served as Sars commissioner.